8-K/A 1 vvc8ka-aug01.txt FORM 8-K AMENDMENT NO. 1 SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549 ------------------------ FORM 8-K/A ----------------------- AMENDMENT NO. 1 TO CURRENT REPORT Pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934 Date of Report: August 27, 2001 VECTREN CORPORATION (Exact Name of Registrant as Specified in Its Charter) INDIANA (State or Other Jurisdiction of Incorporation) 1-15467 35-2086905 ------- ---------- (Commission File Number) (IRS Employer Identification No.) 20 N.W. Fourth Street Evansville, Indiana 47741 (Address of Principal Executive Offices)(Zip Code) Registrant's Telephone Number, Including Area Code: (812) 491-4000 Item 7. Financial Statements and Exhibits. On October 31, 2000, Vectren Corporation, the public utility holding company of Indiana Gas Company, Inc. (the company), completed the acquisition of the natural gas distribution assets from The Dayton Power and Light Company, a wholly owned subsidiary of DPL, Inc. The business will operate under the name Vectren Energy Delivery of Ohio, Inc. (VEDO). Under the acquisition structure, the company holds a 47 percent undivided ownership interest and VEDO has a 53 percent undivided ownership interest. This Form 8-K/A amends the Current Report on Form 8-K filed by Vectren Corporation on January 16, 2001 to provide additional information on the calculation of pro forma interest expense in Note 3b and the pro forma balance sheet in the introduction. The following financial statements is included: Pro forma financial statements of Vectren Corporation for the year ended December 31, 1999 and as of September 30, 2000 and for the nine months ended September 30, 2000. SIGNATURES Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned hereunto duly authorized. VECTREN CORPORATION (Registrant) Dated: August 27, 2001 By: /s/ M. Susan Hardwick ------------------------- M. Susan Hardwick Vice President and Controller Vectren Corporation And Subsidiary Companies Index ------------------------------------------------------------------------------- Unaudited Pro Forma Combined Financial Statements Page Introduction 1 Unaudited Pro Forma Combined Balance Sheet as of September 30, 2000 2 Unaudited Pro Forma Combined Statement of Income for the Year Ended December 31, 1999 3 Unaudited Pro Forma Combined Statement of Income for the Nine Months Ended September 30, 2000 4 Notes to Pro Forma Financial Statements 5 1 Vectren Corporation and Subsidiary Companies Pro Forma Financial Information The accompanying financial statements present the unaudited pro forma balance sheet as of September 30, 2000 and the unaudited pro forma statement of income for the nine months ended September 30, 2000 and for the year ended December 31,1999. On October 31, 2000, Vectren Corporation (Vectren) completed its acquisition of the natural gas distribution assets of The Dayton Power and Light Company (Acquisition) for approximately $465 million pursuant to an Asset Purchase Agreement dated December 14, 1999. Vectren acquired the gas utility assets as a tenancy in common through two separate wholly-owned subsidiaries. Operations will be conducted under the name Vectren Energy Delivery of Ohio (VEDO). Under the acquisition structure, Indiana Gas Company, Inc., one of Vectren's operating public utilities, holds a 47 percent undivided ownership interest and VEDO has a 53 percent undivided ownership interest. The unaudited pro forma balance sheet as of September 30, 2000 reflects the combination of the September 30, 2000 balance sheet of Vectren Corporation and the October 31, 2000 balance sheet of the Dayton Power & Light Company Natural Gas Retail Distribution Business. The pro forma statement of income for the nine month period ended September 30, 2000 and for the year ended December 31, 1999 are presented as if the Acquisition had occurred at January 1, 1999. Preparation of the pro forma financial information was based on assumptions deemed appropriate by management. The pro forma information is unaudited and is not necessarily indicative of the results which actually would have occurred if the transaction had been consummated at the beginning of the period presented, nor does it purport to represent the future financial position and results of operations for future periods. The pro forma information should be read in conjunction with the audited consolidated financial statements of Vectren filed on Form 8-K for the year ended December 31, 1999 and the unaudited financial statements of Vectren filed on Form 10-Q for the quarter ended September 30, 2000. 2
VECTREN CORPORATION AND SUBSIDIARY COMPANIES UNAUDITED PRO FORMA COMBINED BALANCE SHEET As Of September 30, 2000 (In Thousands) Pro forma Adjustments --------------------- Vectren Dayton Vectren Historical Acquisition (2a) Pro Forma ---------- ---------- ---------- ASSETS Current Assets: Cash and cash equivalents $ 19,009 $ (2,482) (2c) $ 16,527 Temporary investments 826 - 826 Accounts receivable, net 134,821 11,634 146,455 Accrued unbilled revenues 21,058 - 21,058 Inventories 47,897 54,199 102,096 Prepaid gas delivery service 46,788 - 46,788 Recoverable fuel and natural gas costs 30,680 8,156 38,836 Prepayments and other current assets 31,376 13,621 44,997 ---------- -------- --------- Total current assets 332,455 85,128 417,583 ---------- -------- --------- Utility Plant: Original cost 2,419,568 334,804 2,754,372 Less: accumulated depreciation and amortization 1,069,471 145,939 1,215,410 ---------- -------- --------- Net utility plant 1,350,097 188,865 1,538,962 ---------- -------- --------- Other Investments: Investments in leveraged leases 91,253 - 91,253 Investments in partnerships and other corporations 80,873 - 80,873 Notes receivable 62,384 - 62,384 Other 2,008 - 2,008 ---------- ------- --------- Total other investments 236,518 - 236,518 ---------- ------- --------- Nonutility property, net of accumulated depreciation 89,530 1,605 91,135 Other Assets: Goodwill - 199,600 (2b) 199,600 Deferred charges 20,578 (3,336)(2c) 17,242 Unamortized debt costs 14,970 - 14,970 Demand side management programs 25,686 - 25,686 Other 3,134 - 3,134 -------- -------- --------- Total other assets 64,368 196,264 260,632 ---------- -------- --------- TOTAL ASSETS $2,072,968 $471,862 $2,544,830 ========== ======== =========
The accompanying notes are an integral part of these pro forma combined financial statements.
VECTREN CORPORATION AND SUBSIDIARY COMPANIES UNAUDITED PRO FORMA COMBINED BALANCE SHEET As Of September 30, 2000 (In Thousands) Pro forma Adjustments --------------------- Vectren Dayton Vectren Historical Acquisition(2a) Pro Forma ---------- ----------- --------- LIABILITIES AND SHAREHOLDERS' EQUITY Current Liabilities: Current maturities of adjustable rate $ 53,700 $ - $ 53,700 bonds subject to tender Current maturities of long-term debt and other obligations 258 - 258 Short-term borrowings 310,545 463,981 (2d) 774,526 Accounts payable 99,964 - 99,964 Refunds to customers and customer deposits 13,556 7,881 21,437 Accrued taxes 14,344 - 14,344 Accrued interest 12,617 - 12,617 Accrued purchase gas 15,076 - 15,076 Other current liabilities 50,506 - 50,506 -------- -------- -------- Total current liabilities 570,566 471,862 1,042,428 -------- -------- -------- Deferred Credits and Other Liabilities: Deferred income taxes 203,219 - 203,219 Accrued postretirement benefits other than pensions 44,675 - 44,675 Unamortized investment tax credits 23,756 - 23,756 Other 18,111 - 18,111 -------- -------- -------- Total deferred credits and other liabilities 289,761 - 289,761 -------- -------- -------- Commitments and Contingencies Minority interest in subsidiary 1,900 - 1,900 Capitalization: Long-term debt and other obligations, net of current maturities 484,074 - 484,074 Preferred stock of subsidiary: Redeemable 8,076 - 8,076 Nonredeemable 8,889 - 8,889 -------- -------- -------- Total preferred stock 16,965 - 16,965 -------- -------- -------- Common stock (no par value) - issued and outstanding 61,219 213,742 - 213,742 Retained earnings 495,886 - 495,886 Accumulated other comprehensive income 74 - 74 -------- -------- -------- Total common shareholders' equity 709,702 - 709,702 -------- -------- -------- Total capitalization 1,210,741 - 1,210,741 -------- -------- -------- TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY $2,072,968 $ 471,862 $2,544,830 ======== ======== =========
The accompanying notes are an integral part of these pro forma combined financial statements.
VECTREN CORPORATION AND SUBSIDIARY COMPANIES UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME For The Year Ended December 31, 1999 (In Thousands) Pro forma Adjustments ----------------------- Vectren Dayton Acquisition Vectren Historical Historical Adjustments Pro forma ----------- ---------- ------------ --------- OPERATING REVENUES: Gas utility $ 499,573 $218,866 $ - $ 718,439 Electric utility 307,569 - - 307,569 Energy services and other 261,275 - - 261,275 --------- -------- ------- --------- Total operating revenues 1,068,417 218,866 - 1,287,283 --------- -------- ------- --------- OPERATING EXPENSES: Cost of gas sold 266,429 131,302 - 397,731 Fuel for electric generation 66,305 - - 66,305 Purchased electric energy 20,791 - - 20,791 Cost of energy services and other 247,590 - - 247,590 Other operating 189,622 29,180 - 218,802 Depreciation and amortization 86,998 8,117 4,990 (3a) 100,105 Taxes other than income taxes 29,910 23,070 - 52,980 --------- -------- -------- -------- Total operating expenses 907,645 191,669 4,990 1,104,304 --------- -------- -------- --------- OPERATING INCOME (LOSS) 160,772 27,197 (4,990) 182,979 OTHER INCOME: Equity in earnings of unconsolidated investments 11,642 - - 11,642 Other - net 8,902 - - 8,902 --------- -------- -------- --------- Total other income 20,544 - - 20,544 --------- -------- -------- --------- INTEREST EXPENSE 42,862 - 27,839 (3b) 70,701 --------- -------- -------- --------- INCOME (LOSS) BEFORE PREFERRED DIVIDENDS AND INCOME TAXES 138,454 27,197 (32,829) 132,822 PREFERRED DIVIDEND REQUIREMENT OF SUBSIDIARY 1,078 - - 1,078 --------- -------- -------- --------- INCOME (LOSS) BEFORE INCOME TAXES 137,376 27,197 (32,829) 131,744 INCOME TAXES (BENEFIT) 45,708 9,204 (11,490)(3c) 43,422 --------- -------- -------- --------- INCOME (LOSS) BEFORE MINORITY INTEREST 91,668 17,993 (21,339) 88,322 MINORITY INTEREST IN SUBSIDIARY 920 - - 920 --------- -------- -------- --------- NET INCOME (LOSS) $ 90,748 $ 17,993 $(21,339) $ 87,402 ========= ======== ======== ======== AVERAGE COMMON SHARES OUTSTANDING 61,306 61,306 61,306 61,306 DILUTED COMMON SHARES OUTSTANDING 61,430 61,430 61,430 61,430 BASIC EARNINGS PER AVERAGE SHARE OF COMMON STOCK $ 1.48 $ .29 $ (.35) $ 1.43 DILUTED EARNINGS PER SHARE OF COMMON STOCK $ 1.48 $ .29 $ (.35) $ 1.42
The accompanying notes are an integral part of these pro forma combined financial statements.
VECTREN CORPORATION AND SUBSIDIARY COMPANIES UNAUDITED PRO FORMA COMBINED STATEMENT OF INCOME For Nine Months Ended September 30, 2000 (In Thousands) Pro forma Adjustments --------------------- Vectren Dayton Acquisition Vectren Historical Historical Adjustments Pro forma ---------- ---------- ----------- ---------- OPERATING REVENUES: Gas utility $ 391,486 $ 167,696 $ - $ 559,182 Electric utility 249,215 - - 249,215 Energy services and other 300,074 - - 300,074 ---------- ---------- ---------- ---------- Total operating revenues 940,775 167,696 - 1,108,471 ---------- ---------- ---------- ---------- OPERATING EXPENSES: Cost of gas sold 229,373 105,628 - 335,001 Fuel for electric generation 51,722 - - 51,722 Purchased electric energy 25,085 - - 25,085 Cost of energy services and other 285,856 - - 285,856 Other operating 142,620 17,058 - 159,678 Merger costs 31,306 - - 31,306 Depreciation and amortization 75,008 6,615 3,742(3a) 85,365 Taxes other than income taxes 22,170 15,408 - 37,578 --------- ---------- ---------- ---------- Total operating expenses 863,140 144,709 3,742 1,011,591 ---------- ---------- ---------- ---------- OPERATING INCOME (LOSS) 77,635 22,987 (3,742) 96,880 OTHER INCOME: Equity in earnings of unconsolidated investments 16,950 - - 16,950 Other - net 14,497 - - 14,497 ---------- ---------- ---------- ---------- Total other income 31,447 - - 31,447 ---------- ---------- ---------- ---------- INTEREST EXPENSE 37,940 - 20,879(3b) 58,819 ---------- ---------- ---------- ---------- INCOME (LOSS) BEFORE PREFERRED DIVIDENDS AND INCOME TAXES 71,142 22,987 (24,621) 69,508 PREFERRED DIVIDEND REQUIREMENT OF SUBSIDIARY 776 - - 776 ---------- ---------- ---------- ---------- INCOME (LOSS) BEFORE INCOME TAXES 70,366 22,987 (24,621) 68,732 INCOME TAXES (BENEFIT) 23,527 7,832 (8,617)(3c) 22,742 ---------- ---------- ---------- ---------- INCOME (LOSS) BEFORE MINORITY INTEREST 46,839 15,155 (16,004) 45,990 MINORITY INTEREST IN SUBSIDIARY 983 - - 983 ---------- ---------- ---------- ---------- NET INCOME (LOSS) $ 45,856 $ 15,155 $ (16,004) $ 45,007 ========== ========== ========== ========== AVERAGE COMMON SHARES OUTSTANDING 61,257 61,257 61,257 61,257 DILUTED COMMON SHARES OUTSTANDING 61,332 61,332 61,332 61,332 BASIC EARNINGS PER AVERAGE SHARE OF COMMON STOCK $ .75 $ .25 $ (.26) $ .73 DILUTED EARNINGS PER SHARE OF COMMON STOCK $ .75 $ .25 $ (.26) $ .73
The accompanying notes are an integral part of these pro forma combined financial statements. 5 VECTREN CORPORATION AND SUBSIDIARY COMPANIES NOTES TO UNAUDITED PRO FORMA COMBINED FINANCIAL STATEMENTS 1. Basis of Presentation Vectren Corporation (Vectren) is a public utility holding company whose wholly-owned subsidiary, Vectren Utility Holdings, Inc. (VUHI), is the holding company of Vectren's two operating public utilities, Indiana Gas Company, Inc. (Indiana Gas), and Southern Indiana Gas and Electric Company. On October 31, 2000, Vectren completed its acquisition of the natural gas distribution assets of The Dayton Power and Light Company (Acquisition) for approximately $465 million pursuant to an Asset Purchase Agreement dated December 14, 1999. Vectren acquired the gas utility as a tenancy in common through two separate wholly-owned subsidiaries. Operations will be conducted under the name Vectren Energy Delivery of Ohio (VEDO). Under the acquisition structure, Indiana Gas holds a 47 percent undivided ownership interest and VEDO has a 53 percent undivided ownership interest. The accompanying combined pro forma financial statements give effect to the Acquisition. The unaudited pro forma combined balance sheet as of September 30, 2000 is presented as if the Acquisition and the related debt financing had occurred on September 30, 2000. The pro forma combined statement of income for the nine month period ended September 30, 2000 and for the year ended December 31, 1999 are presented as if the Dayton Acquisition had occurred at January 1, 1999. 2. Pro Forma Adjustments to Balance Sheet (a) Determination of total purchase price: Cash purchase price $ 463,981 Liability assumed for customer deposits 7,881 Transaction costs 5,818 --------- Total purchase price $ 477,680 ========= (b) Allocation of purchase price: Cash purchase price $ 463,981 Transaction costs 5,818 --------- 469,799 ========= Tangible assets acquired 278,080 Liabilities assumed (7,881) --------- Net assets acquired 270,199 --------- Excess allocated to goodwill $ 199,600 ========= The above reflects Management's preliminary purchase price allocation based upon information currently available. The purchase price is subject to adjustment based upon finalization of the closing balance sheet in accordance with the Asset Purchase Agreement. Management believes that any such adjustment will not be material. (c) Pro forma adjustment to reclassify deferred transaction costs incurred as of September 30, 2000 of $3,336 to goodwill and to reflect the cash payment at closing of $2,482 for the remaining transaction costs. (d) A $435 million commercial paper program established by VUHI provided $434,360 of the initial Acquisition financing. Additionally, Indiana Gas provided $29,621 from its commercial paper program for total financing of $463,981. On December 28, 2000, VUHI issued a $150 million Floating Rate Note due December 27, 2001, replacing an equal amount of commercial paper. Management anticipates that the short-term financings will be replaced over time with permanent, long-term financing. Short- term Annualized borrowings Interest ----------- ---------- Commercial paper (VUHI) $284,360 $ 16,189 6.6425% Floating rate note (VUHI) 150,000 9,964 Commercial paper (Indiana Gas) 29,621 1,686 -------- -------- $463,981 $ 27,839 ======== ======== 3. Pro Forma Adjustments to Income Statements (a) Pro forma adjustment to reflect the amortization of goodwill of $199,600 amortized over a period of 40 years. (b) Pro forma adjustment to reflect the interest expense from the Acquisition financing based upon borrowings of $463,981 at an average interest rate of approximately 6.0 percent annum based upon Indiana Gas' and VUHI's composite average short-term borrowing rate at the date of the Acquisition (see 2d). (c) Pro forma adjustment to reflect the income tax benefit on a combined federal and state statutory rate of 35 percent. (d) Vectren and Dayton Power and Light Company (DP&L) entered into an agreement whereby DP& L will provide transitional support to Vectren in the areas of meter reading, billing, cash receipts, collections, customer deposits, telecommunication services and other miscellaneous services for a predetermined fee. Because these fees will be no greater than the historical costs incurred by DP&L for such support services for its natural gas distribution operations, no pro forma adjustment has been reflected.